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IBM and Infosys fight for Indian IT captive unit of Fidelity

Neha Sood


IBM and Infy are at loggerheads for having Fidelity’s, (the world’s largest Mutual Fund Company) Indian IT captive unit. IBM has proposed to pay about $150 million for the acquisition whereas Infy is ready shell out about $180 million for the unit. However, IBM is more likely to emerge as the winner because of the two decade relationship it has developed with Fidelity.


By way of outsourcing, Infosys gets about $50 million of business from Fidelity; IBM is handed over $200 million business volume. Bidders also included Capgemini, HP-EDS and Accenture; however these opted out of the competition. As per the sources, reason for Accenture coming out of the bidding was the possibility of not taking up the complete workforce.


Some of the Tier-II Indian firms such as iGate were also interested in running for the race but gave in to the constraints put by Fidelity. The IT captive unit employs about 2000 people and is centered in Chennai and Bangalore.

 
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